Why Are the Bid-Ask Spreads Quoted in the Interbank Spot

question 32

Essay

Why are the bid-ask spreads quoted in the interbank spot market? What is their purpose?

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Definitions:

Distinguishes

Identifies differences or unique characteristics that set someone or something apart from others.

Meaningful Difference

A significant and relevant variation between groups or measurements that is not due to chance.

Earlier Decision

A previous verdict or ruling in a legal case that may influence the outcome of subsequent similar cases.

Plain Meaning

A legal principle stating that if the words in a statute or legal document are clear and unambiguous, they should be interpreted in their ordinary sense without further interpretation.